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Pound rises after BoE holds rate steady and rules out quick cuts

(Updates prices, adds comment and context)

By Harry Robertson

LONDON, Nov 2 (Reuters) - The pound rose on Thursday after the Bank of England held interest rates at a 15-year high but stressed that it did not intend to cut them any time soon.

The Bank left borrowing costs unchanged at 5.25% and published forecasts which showed the British economy was likely to skirt close to a recession and flat-line in the coming years.

Sterling extended gains and was last up 0.53% at $1.2214. It was around 0.35% higher before the BoE decision at $1.2193, on a day when a fall in U.S. bond yields was weighing on the dollar.

The yield on the benchmark 10-year UK bond, also known as a Gilt, was last 14 basis points (bps) lower on the day at 4.393%, down around 2 bps from before the decision. Yields move inversely to prices.

Britain's FTSE 100 stock index was last up 1.24%, effectively unchanged from before the BoE decision.

The Monetary Policy Committee (MPC) voted 6-3 to keep the Bank Rate on hold, in line with economists' expectations in a Reuters poll.

"The MPC's latest projections indicate that monetary policy is likely to need to be restrictive for an extended period of time," the BoE said.

"Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressure."

Focus will now turn to BoE Governor Andrew Bailey's press conference at 1230 GMT.

Britain's 2-year gilt yield was little changed from before the BoE decision, trading around 7 bps lower at 4.722%.

Global stock markets were rallying on Thursday and the dollar falling after the Federal Reserve held interest rates on Wednesday and the U.S. Treasury announced lower debt issuance than expected, causing U.S. bond yields to drop.

"The question going forward is how long this standstill will last for – with financial markets expecting it to be a considerable period of smooth sailing," said Jeremy Batstone-Carr, strategist at Raymond James.

"The door for future rate hikes still sits ajar, and the MPC will likely remain vigilant for further fluctuations and risks in the months ahead."

(Reporting by Harry Robertson; Editing by Dhara Ranasinghe, Kirsten Donovan)